Zynga has a few option bulls saying, “Yelp!” as does the broader market in some "business as unusual" profit-taking. As of 12:00 ET the SP-500 (SPY) is off 0.37% despite one green apple still dangling temptation out to bulls.
On the heels of Thursday’s 0.62% leap of faith into March and fresh closing highs for the SP-500, bulls are yelping over a slight pinch of long-awaited profit-taking after attempting to extend 13 and 21-week time cycles by a week—and snub our bean counting technical friend Fibonacci.
In those intertwined markets of influence, shares of Apple (AAPL) are still flaunting some Green Delicious appeal with its modest, but market-bucking gainer of 0.10%. Next week Apple is set to unveil its iPad3 to more than a bit of vocal pre-rollout fanfare and maybe some post celebration scrutiny as well.
The US Oil Fund (USO) is dashing the technical aspirations of Thursday’s 3-Day and “never-too-simple” pullback and subsequent breakout players seeking higher prices. Intraday, USO is off 2.40% and breaking below 10SMA support.
Inspired but proven-to-be faulty fears of supply disruptions out of Saudi Arabia following a false report of an Iranian attack, as well as continued strength in the US Dollar (UUP) appear to be Friday’s leading catalysts for re-pricing a market that’s always right.
With the Greenback tacking on 0.70%, dollar-denominated metals Comex Gold (GLD) and Silver (SLV) are being pressured slightly. Intraday, less precious declines of 0.25% and 1.80% in narrow consolidation trade is setting up testing of the 200SMA for support in both products.
And the VIX ($VIX) is mostly unchanged near 17.50%. The fear index is just below its 10SMA but roughly 6% above last Friday’s stretchy and nearly complacent 16.50% reading. Overall, the action is mostly neutral on both shorter and longer-term time frames.
On the corporate side, local consumer review website Yelp! (YELP) is trading roughly 63% above its upwardly-revised IPO price of $15 with shares changing hands at 24.35 and yielding a market cap of about $1.4B. In an interview with CNBC, the CEO stated he has a “grand vision” for the company and wants to make it “the Amazon of local advertising and information.”
In sympathy for the well-received IPO and with Facebook’s debut not too far off, shares of Zynga (ZNGA) are up 4.50% but pulling back intraday from fresh all-time-highs after breaking out of a 20% wide, three-week flat base. In those sometimes accurate heat-seeking option markets, Zynga’s stock move is attracting the attention of bulls in its calls.
Intraday, Zynga call volume is favored over its puts by a 3-to-1 margin on spiking implied volatility and overall heavy trading of 50,000 contracts. Concentrated activity, for better or worse, given today’s less-than-unidirectional breakout, can be found in the ATM March and April 15 calls, as well as the 16 through 18 strikes; which now, slightly more out-of-the-money are likely to produce a "Yelp!" or two. Have a good weekend.
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
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